Meet the New Big Blue: Facebook

Each Monday, MoneyBeat publishes a short column in the WSJ print edition highlighting a statistic getting traction in the markets. This week’s “big number“ is $195.5 billion, market capitalization of Facebook Inc., which surpassed IBM’s market value last week.

There’s a new Big Blue in town.

Facebook Inc.'supbeat quarterly results catapulted its shares up 9.9% last week, giving the social network a market capitalization of $195.5 billion, according to FactSet’s share-count calculations. The rally pushed Facebook ahead of International Business Machine Corp.’s $194 billion market value despite the fact that IBM had eight times the quarterly revenue of Facebook.

The social network now finds itself in the top-15 most valuable companies in the S&P 500. Its market capitalization, which exceeds the combined value of Visa Inc. and MasterCard Inc., is greater than about 2/3 of the 30 stocks in the Dow Jones Industrial Average.

Facebook’s shares closed Friday at $75.19. The stock would need to hit $76.93 for the company’s market capitalization to surpass $200 billion, according to FactSet. Only 12 companies in the S&P 500 have market capitalizations north of $200 billion, according to FactSet.

Facebook last week reported its second-quarter profit more than doubled as the company offered further proof of its transformation into a mobile-advertising juggernaut. The social network’s $2.9 billion quarterly revenue exceeded analysts’ estimates for a ninth straight quarter, with about 62% of the company’s advertising revenue coming from mobile devices.

IBM, meanwhile, failed for a ninth straight quarter to boost its quarterly revenue, as sales from a key line of server systems continued to slump. Second-quarter revenue decreased to $24.36 billion from $24.9 billion a year earlier. IBM shares are down 1.5% over the past 12 months.

Facebook is one of only five stocks in the S&P 500 that has surged more than 100% over the past 12 months. And analysts remain bullish.

“We continue to find Facebook’s stock attractive relative to the vast opportunities presented by the user engagement on such a massive scale,” says Michael Graham, an analyst at Canaccord Genuity.